Bitcoin and BHC prices are both expected to oscillate for a while after.As we have also seen with altcoins it could also reduce liquidity on exchanges amplifying volatility.
It is not a valid way to measure value of a widget (or virtual commodity in this instance) for the same reason that the value of a Renoir or Matisse painting is not based on the value of the inputs (oil paint, canvas, brush, frame, etc.).At this rate, by the end of next year, there will probably be more merchants that accept bitcoins than actual on-chain users of bitcoin.Then in a second step make some assumptions about market adoption for all of 2015 and use the estimated coefficient to derive (one small part) of the future price.
In general, a buyer and a seller can agree on anything to be used as money (both regulated and unregulated payment methods) in a specific transaction.For balance I spoke with Raffael Danielli, a quantitative analyst at ING Investment Management and proprietor of Matlab Trading, and in his view.We cover news related to bitcoin exchanges, bitcoin mining and price forecasts for various.This is how monetary demand for a good is defined and this is what constitutes the medium of exchange function.Survival of the fittest is what comes to mind when thinking of the future of Bitcoin price and Bitcoin cash price.Fast forward to last week, Matt Mullenweg, co-founder of WordPress explained that bitcoin was recently dropped as a payments option (it may be added again later).Does Bitcoin Cash have no plans to adopt SegWit, or the Lightning Network,.
It clearly does have some kind of value to thousands, perhaps enormous value and utility to hundreds of thousands of traders, merchants and consumers of all stripes.This is because changes in coin demand get translated into changes in coin price, making price volatility proportional to demand volatility.Hoarding also has a positive effect on liquidity, thus contradicting your argument that this causes slippage.
One additional challenge with the X%-of-incumbents market share argument (and this occurs in every industry) is that it assumes that market participants (Alice and Cathy) are willing to go through the frictions to use Bitcoin, the network instead of existing rails or products like Apple Pay.So there is an incentive to pump and manufacture as much good news as possible (e.g., astroturfing).Robert Sams, co-founder of Clearmatics and a former interest rate trader, has a good explanation ( pdf ) of this phenomenon.Volatility in the price of bitcoin should not impede retailer acceptance of bitcoin, in our opinion, as merchants and payment processors are entirely shielded, and we expect consumers will be shielded in the future.And without any additional actual use-cases that generate transactional demand or additional aggregate demand from outside investors, it is likely that the bitcoin price will largely stay within the range it has seen this past year.
On almost a daily basis there is a discussion on reddit or Twitter about merchant acceptance and how the increase in adoption of bitcoins for payments by merchants should eventually be reflected in higher market prices of bitcoin itself.And as a consequence, it increases downside pressure on the price.
To get a ballpark understanding, I contacted Automattic (the parent company of WordPress) and asked politely if they could share how much revenue they have received in bitcoin, being one of the highest-visibility brands ever to accept bitcoin.
From July 24-25, the value of bitcoin cash futures hovered to a.We will not disclose that type of information since we keep our financial information private, as well as any information as it relates to our users.
Since rates of future adoption are highly uncertain, high volatility is inevitable, as expectations wax and wane with coin-related news, and the coin market rationalises high expected returns with high volatility (no free lunch).